Management Science Letters (Jan 2013)

Accrual-based accounting system versus cash-based accounting: An empirical study in municipality organization

  • Mahbobeh Arab,
  • Seyed Mohsen Tabatabaei Mozdabadi,
  • Hossein Mohammad Pour Zarandi,
  • Esmaeel Ghafari

Journal volume & issue
Vol. 3, no. 1
pp. 251 – 256

Abstract

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There are many cases, where we may wish to choose a good accounting system and would like to learn how they work and the advantages and disadvantages of each so we can choose the better one for a business. In this paper, we present an empirical survey to understand whether we can choose accrual or cash accounting system. The proposed study designs a questionnaire among 220 experts in area of accounting affairs. The survey considers four sub hypotheses and one main hypothesis to see whether there are reliable rules and regulations in accrual-based accounting compared with cash accounting or not. Similarly, the survey investigates whether accrual-based accounting is more informative, comprehensive and provides better comparative results compared with cash accounting. The results indicate that accrual-based account performs better in terms of all mentioned criteria and it is a better method for managing accounting affairs compared with cash accounting systems.

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